Sunday, April 30, 2006

Ukraine's President, Viktor Yushchenko, has indicated that a coalition agreement may not be singed until June 2006. LINK For-ua.com

Whilst other players have all signed agreements on the formation of a coalition government Our Ukraine which is spearheaded by Ukraine's President has to date refused to sign any agreement. Under dispute is Ukraine's choice of Prime-minister and other cabinet positions.

Yulia Timoshenko party and the Socialist Party of Ukraine both who are part of the Orange coalition have agreed to the formation of an Orange coalition with Yulia Tymoshenko who received 22% of the Parliamentary vote taking the Prime-ministers position and the leader of the Socialist Party ( 7.5%) as the Parliamentary Chairman/Speaker.

On the surface of it this proposal seams fair and justified given that Our Ukraine who only received 14% of voters support currently holds the Presidency.

Problem is Our Ukraine are not happy about Yulia Tymoshenko being re-appointed as Prime Minister. Yulia Tymoshenko was sacked by Viktor Yushchenko last year following Yulia's allegations of corruption in the Our Ukraine ministerial and Presidential offices.

The announcement by the President that a coalition agreement would not be agreed to until June seriously undermines Ukraine's economic and political stability.

Uncertainty and procrastination only undermine Ukraine's future

If the parties can not quickly and amicable agree to a coalition within the first week of Parliament sitting then it all over but for the shouting. Yushchenko and Our Ukraine would have singly handed destroyed the Orange Revolution before it started. What confidence can their be in any marriage when it starts off on a bad footing?

Any delay in the formation of a government would be a disaster for Ukraine and Ukraine's democratic development.

The President, who is currently travelling around the Baltic countries, should be back in Ukraine trying to avoid any possible fall-out as a result of his parties failure to sign up to a working coalition. The formation of a working coalition government should and must be his first priority.

It is of serious concern that the president is prepared to place at risk Ukraine's economic and p[locity development for the sake of power politics.

Politics is the art of compromise

Our Ukraine needs to decide if they support the formation of an Orange coalition or they don't. With any coalition the division of power needs to be balanced and given the outcome of the results of the election the proposal on the table that has been signed by all parties involved in the Orange camp except Our Ukraine is reasonable.

Our Ukraine with only 14% of voters support is not in the position to make unrealistic demands. They already have the Presidency and they must now demonstrate that they are reasonable and considerate and prepared to work together for the sake of Ukraine and not just the interest of a minor party.

If they can not agree and live up to the ideals of the orange movement then they should form a coalition with the Party or Regions.

Fresh elections out of the question.

History shows that disunity and indecisiveness is the death of any government. The other alternative of holding fresh elections would be a disaster. Our Ukraine would be the biggest loser as the costs of holding fresh elections are prohibitive and are unlikely to produce a different outcome other then provide Party of Regions with the opportunity of a clean sweep win.

Politics aside.

The most important at risk in Our Ukraine's procrastination and refusal to agree to a coalition is Ukraine's economy. To weeks is a long time in politics and two moths is even longer in terms of economic stability.

If, as LEvko reports, this mess won't be sorted out until June, will the markets hold still for that? That is a long time for politics and an eternity for markets. Will there be any confidence in the government after all that? It is quite possible that any confidence could evaporate and start a selloff. It happened in the 90s in both Mexico and Venezuela for a lot less.

A rapid devaluation of the currency is not a pretty thing. I was in Venezuela when it happened there. The bolivar crashed, there was a run on the dollar and that caused the central bank to put controls on dollar buys. They needed to do this to be able to use dollars to control the descent (soaking up the bolivars on the market requires buying with dollars) and dollars reserves are needed to pay for goods coming in the the country.

The restrictions pretty much put a halt on imports. I talked with a grain trader at one point and he said the whole country was down to a 3 days supply of wheat. And the owners of any tankers with wheat bound for Venezuelan ports were seriously considering turning them back around because they thought they wouldn't get paid when the grain landed.

People tend to get surly when they get hungry and the Venezuelans have been known to riot. The owners didn't turn them back in the end and there were no riots and Venezuela came through it but came butt up against nationalism. Enter Hugo Chavez. Not a good ending, really.

I hope it doesn't happen here (and I should add, there are many, many reasons why it shouldn't.) But one thing is for certain: The parties on all sides believe they are in a fight to the death with their opponents only and with no others. But there are other interests and other actors who also have a say in what happens in Ukraine. The politicians here need to take that into account in their deliberations and in their public statements. Because those other actors, acting on the basis of self interest, criticize it for that reason as we will, can have a very significant effect on the lives of Ukrainians. (That has been my point with the very careless— irresponsible, really— way the investment situation here has been handled.)

But noting what has been said and done in the past, I won't be holding my breath.

News in review

Parliamentary Assembly Council of Europe (PACE) Explanatory Report calls on Ukraine to adopt a Full Parliamentary System in line with other European States

"It would be better for the country to switch to a full parliamentary system with proper checks and balances and guarantees of parliamentary opposition and competition."

Constitutional Court challenge

The authority of the President to dismiss Ukraine's parliament has been challenged in Ukraine's Constitutional Court amidst concern that the President's actions are unconstitutional in that he has exceeded his authority to dismiss Ukraine's parliament.

On April 19 the Parliamentary Assembly of the Council of Europe passed a resolution in consideration of a report titled Functioning of democratic institutions in Ukraine. (Items 13 and 14) stated:

“ The Assembly deplores the fact that the judicial system of Ukraine has been systematically misused by other branches of power and that top officials do not execute the courts’ decisions, which is a sign of erosion of this crucial democratic institution. An independent and impartial judiciary is a precondition for the existence of a democratic society governed by the rule of law. Hence the urgent necessity to carry out comprehensive judicial reform, including through amendments to the constitution.

The Assembly reiterates that the authority of the sole body responsible for constitutional justice – the Constitutional Court of Ukraine – should be guaranteed and respected. Any form of pressure on the judges is intolerable and should be investigated and criminally prosecuted. On the other hand, it is regrettable that in the eight months of its new full composition, the Constitutional Court has failed to produce judgments, thus failing to fulfil its constitutional role and to contribute to resolving the crisis in its earlier stages, which undermines the credibility of the court.

There is an urgent need for all pending judgments, and in particular the judgment concerning the constitutionality of the Presidential Decree of 2 April 2007, to be delivered. If delivered, the latter should be accepted as binding by all sides.
”

The associated explanatory report under the sub-heading of Pressure on the courts expressed concern that "Several local courts have made decisions to suspend the Presidential Decree only to then withdraw them, allegedly under pressure from the presidential secretariat." (item 67)

In emphasis the report (item 68) stated

"This is a worrying tendency of legal nihilism that should not be tolerated. It is as clear as day that in a state governed by the rule of law judicial mistakes should be corrected through appeal procedures and not through threats or disciplinary sanctions ”

On April 30, on the eve of the Constitutional Court's ruling on the legality of the president's decree dismissing Ukraine's parliament, President Yushchenko, in defiance of the PACE resolution of April 19 intervened in the operation of Ukraine's Constitutional Court by summarily dismissing two Constitutional Court Judges, Syuzanna Stanik and Valeriy Pshenychnyy, for allegations of "oath treason." His move was later overturned by the Constitutional Court and the judges were returned by a temporary restraining order issued by the court.

Following the president's intervention the Constitutional Court still has not ruled on the question of legality of the president's actions.

Stepan Havrsh, the President's appointee to the Constitutional Court, in prejudgment of the courts decision and without authorization from the Court itself, commented in an interview published on July 24

“ I cannot imagine myself as the Constitutional Court in condition in which three political leaders signed a political/legal agreement on holding early elections, which also stipulates the constitutional basis for holding the elections... How the court can agree to consider such a petition under such conditions.”

Olexander Lavrynovych, Ukrainian Minister for Justice, in an interview published on Aug 3 is quoted as saying

“ According to the standards of the Constitution and the laws of Ukraine, these elections should have been recognized invalid already today. But we understand that we speak about the State and about what will happen further in this country. As we've understood, political agreements substitute for the law, ... The situation has been led to the limit, where there are no possibilities to follow all legal norms.